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Leverage

The ability to hold an investment position of greater value than that of your equity (collateral). When leveraging (also called gearing) your investment, you need only deposit a fraction of the current value of the instrument you are investing in.

For example if the commodity you are trading in requires a margin of 5%, this allows you to leverage (or gear) your investment 20 times. In other words, a deposit of USD 10,000 can hold a position of USD 200,000.

Limit order

Limit orders are commonly used to enter a market and to take profit at predefined levels. Limit orders to buy are placed below the current market price and are executed when the ask price hits or breaches the price level specified. (If placed above the current market price, the order is filled instantly at the best available price below or at the limit price.)

Limit orders to sell are placed above the current market price, and are executed when the bid price breaches the price level specified. (If placed below the current market price, the order is filled instantly at the best available price above or at the limit price.) When a limit order is triggered, it is filled as soon as possible at the price obtainable on the market.

Note that the price at which your order is filled may differ from the price you set for the order if the opening price of the market is better than your limit price. In the case of Futures, the order will be filled if possible, and any remaining volume will remain in the market as a limit order. In the case of CFDs, the order will be filled if possible, and any remaining volume will remain in the market as a limit order.

Liquid(-ity)

The capacity to be converted easily and with minimum loss into cash. Ultra-short-dated treasury notes are an example of a liquid investment. A liquid market is one in which there is enough activity to satisfy both buyers and sellers.

Long

In general, going long is buying, and going short is selling. A long position will increase in value if market prices increase.

For example, in Forex trading, going long is buying the trade currency of the Forex currency pair. If you were going long on USDJPY, you would be buying USD by selling JPY.

For securities, going long is taking ownership of a security through buying it, as opposed to going short where you sell the security without owning it.

Lot

Used in Futures contract trading to define a fixed contract size corresponding to a fixed amount of the item that will be traded in the future.